First-time buyers, inventory expected to rebound in 2024
The Zillow Home Price Expectations Survey reveals that the housing market may not return to pre-pandemic inventory levels until 2024. A significant decline in home inventory has driven a 32% increase in home values over the past two years. Experts predict a 9% rise in home prices for 2022, influenced by limited supply and rising mortgage rates. First-time homebuyers' market share is expected to remain below 2019 levels until 2024, complicating affordability challenges for low and moderate-income households.
- Survey indicates potential upward trend in home prices, revised to 9% growth for 2022.
- Forecast suggests return of inventory levels to pre-pandemic averages, aiding market recovery.
- Zillow forecasts a 16.3% rise in typical home values from February to December 2022.
- First-time homebuyers' share remains below 2019 levels, hindering market participation.
- Affordability challenges expected to worsen as price increases outpace wage growth.
Panel of housing experts sees pandemic-fueled deficits sticking around until then
- Panel expects a two-year climb back to pre-pandemic for-sale inventory levels
- Share of first-time buyers is forecast to stay below 2019 levels until 2024
- Home price appreciation should outstrip all inflation measures this year except that of energy
SEATTLE, March 24, 2022 /PRNewswire/ -- The housing market is expected to return to pre-pandemic, 2019 norms — at least in terms of inventory and the share of purchases made by first-time home buyers — by 2024 according to a panel of housing market experts polled in the latest Zillow® Home Price Expectations Survey1.
The dwindling supply of homes for sale has been a key driver of the recent explosion in U.S. home values, which have risen
Inventory should return to a monthly average of 1.5 million units or higher in 2024, according to the largest group (
"Inventory and mortgage rates will determine how far and how fast home prices will rise this year and beyond," said Zillow senior economist Jeff Tucker. "We are seeing new listings returning to the market, slowly, as we enter the hottest selling season of the year, but this supply deficit is going to take a long time to fill."
Return of the first-time home buyer
The pandemic ushered in record-breaking price growth alongside rent hikes that made saving for down payments even more difficult. As a result, the share of first-time home buyers dropped from
First-time buyers should regain their pre-pandemic share of the market in a couple of years, according to the majority of experts polled, with
Inflation considerations
Inflation has already begun eroding the bottom lines of American households, with the Bureau of Labor Statistics noting rising costs for energy, housing and food as prime factors driving it to a four-decade high.
Of the six categories considered, survey participants expect energy prices to increase the most over the course of 2022, followed by house prices, residential rents and food costs. Employee wages and stock prices were ranked fifth and sixth, respectively, rounding out the list.
Price growth projections
Pulsenomics founder Terry Loebs said the panel's average projections for home price growth in 2022 have been revised upward, from
"Against the backdrop of tightening Fed policy and increasing mortgage rates, this more bullish outlook for home values suggests that home inventory shortages will remain the dominant price driver this year," Loebs said. "If price increases this year for homes, rents, energy, and food each exceed wage growth – as the panel expects – home affordability challenges will intensify further, especially for low- and moderate-income renters."
Zillow economists forecast a
1 This edition of the Zillow Home Price Expectations Survey surveyed 109 housing market experts and economists between February 16 and March 2, 2022 to gather their predictions for the outlook of the housing market in 2022 and beyond. The survey was conducted by Pulsenomics, LLC on behalf of Zillow, Inc. The Zillow Home Price Expectations Survey and any related materials are available through Zillow and Pulsenomics.
About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life's next chapter. As the most visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and ease.
Zillow Group's affiliates and subsidiaries include Zillow®, Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™, Zillow Closing Services™, Zillow Homes, Inc., Trulia®, Out East®, ShowingTime®, Bridge Interactive®, dotloop®, StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).
About Pulsenomics
Pulsenomics LLC (www.pulsenomics.com) is an independent research firm that specializes in data analytics, opinion research, new product and index development for institutional clients in the financial and real estate arenas. Pulsenomics also designs and manages expert surveys and consumer polls to identify trends and expectations that are relevant to effective business management and monitoring economic health. Pulsenomics LLC is the author of The Home Price Expectations Survey™, The U.S. Housing Confidence Survey, The Housing Confidence Index, and The Transaction Sentiment Index. Pulsenomics®, The Housing Confidence Index™, The Transaction Sentiment Index™, and The Housing Confidence Survey™ are trademarks of Pulsenomics LLC.
SOURCE Zillow
FAQ
What are the predictions for Z and ZG stock regarding housing inventory?
How much are home prices expected to rise in 2022 according to Zillow?
When will first-time homebuyers return to the market according to Zillow?
What is the impact of inflation on home prices for Zillow's projections?
